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America’s “Central Perk” Moment

It’s Monday. Monday morning, to be precise…not exactly everyone’s preferred day. I’d like to help remedy that and rewind to Friday. In reality, I’m posting something I wanted to put up on Friday, but the responsibilities of work and domestic life (in other words, piles of invoices, and Mt. Laundry) held precedence. So, close your eyes and imagine it’s still everyone’s favorite day of the week. Here we go!

Today is Friday; that glorious, long awaited morning (ok, fine, so it’s only been a week) when the birds seem a little happier, the sun seems to shine a little brighter, and even the ominous cold that has laid a soft white frost across much of my state didn’t seem to have as much bite to it. Ah, fabulous Friday. What makes this gateway to the weekend even better is the fact that (insert old fashioned cash register “cha ching” here) it’s payday for millions of people from sea to shining sea. Fine, I’ll cut the dramatics. Give me a break though- it’s Friday! Everything just seems that much better. Back to the point- it’s PAYDAY. We gleefully rip into our paycheck statement and sigh, dismayed at just how much Uncle Sam has taken. It’s like the episode of “Friends” in which Rachel receives her very first paycheck from the iconic coffee shop “Central Perk.” As she happily rips her check out of the envelope, her shoulders slump and her face falls as she imploringly asks “Who is FICA and why is he getting all of my money???” How well spoken.

Don’t get me wrong, I am not against taxation. I realize that our government needs funding in order to carry out the necessary functions which the Constitution has outlined. Pshh, who are we kidding? The government hasn’t stayed within those “necessary functions” for generations. “Necessary Functions” is a place so far removed from us that one needs a telescope to see it. Government intervention and meddling (and in turn, spending) is something that has gone far and beyond the original intent, and I contend that is why we are in the mess we are today. That’s a discussion we’ll save for another day.

For now, let’s go back to the feeling we get when we open up our paychecks and to our dismay, find that a gigantic chunk of what we worked so hard to earn has been whisked away in an instant. And there’s no getting out of it, either, unless of course you’d like the IRS to show up on your doorstep. We can’t be Larry the Cucumber (a la Veggie Tales) and slam the door in the face of the IRS Peach. (In case some of you are lost as to this reference, click here.)

So, what do we do about it?

Let’s rewind again.

Several decades ago, there was a kid who grew up in less than ideal conditions. His family was poor, he was the “wrong color,” and in most estimations of the day, didn’t have much of a shot. In his own words, his family was “po’ ” before they were ‘poor.'” He had good parents, and they raised him to work hard and to never stop trying. Despite the racism they and so many others experienced, they still viewed this country as the land of opportunity. They believed in the ability for the country to change and right its wrongs. They believed in the American dream, and they worked hard to get it. They raised a son who would grow up to work just as hard as they did, break through the barriers that could have held him back, and who would go on to become a major player in several large companies, including a company’s highest office. This kid’s name was Herman Cain, and he ought to know a thing or two about fixing fiscal predicaments.

What Herman Cain lacks in political experience he makes up with common sense. This epitomizes Herman Cain’s economic plan. It’s short, sweet, uncomplicated and makes sense. And today, I’m here to give you a real life example of how his simple plan could do wonders to untangle the rat’s nest of tax codes in existence today and in turn, leave the American taxpayer and the nation as a whole much better off.

It’s quite simple. With a few exceptions here and there for people living below the poverty line, used goods vs. new goods, etc., the plan is:

9% Income Tax

9% Business Tax

9% National Sales Tax

Everything else goes away. Capital gains, death tax, progressive tax rates…it all goes away. It is replaced with this simple plan, rather than continuing to make adjustments to the current broken, progressive system. As Cain so aptly put it, “Continuing to pivot off the current tax code is not going to boost this economy”

Let’s study the average Joe here for a moment. We’ll limit this to my home state for convenience purposes, and we’ll use a basic tax calculator to get a general idea. Average Joe: You’re not married. You make 40,000 a year. Your bimonthly before-tax paycheck is roughly $1,538.46. After the following litany of taxes (Federal, State, Local, Social Security, Medicare, etc.), you’re left with roughly $1,148.15. Of the taxes, federal accounts for $215.38. That is $5,169.12 yearly in federal taxes alone. Total tax burden for this individual is $9367.44 a year.

Under Herman Cain’s plan, this person would pay $138.46 (vs. $215.38!) a paycheck in federal income tax. That is a total savings of $76.92 per paycheck, $153.84 a month, and $1,846.08 per year! Imagine all the things you could do with that extra money, and then multiply that by the entire population. This isn’t even considering what a 9% business tax would do to do to the prices in the marketplace. A huge portion of the price of a good or service has a great deal to do with the amount of taxation involved, thus just imagine what lowering those taxes would do to the price for the consumer.

I would like to get into dissecting Herman Cain’s 9-9-9 plan a little further and dispel a few of the concerns that have been raised about what I find to be a very interesting approach. . . but, *sigh,* it’s time to get back to Monday morning. Stay tuned for more to come!